In architecture, form follows function. In management, leaders decide what needs to be done, and design—structure—the business around the prime purpose.
While pyramid-like hierarchies with the traditional omnipotent being at the top linger, leading-edge organisations can have an imaginative design. It’s not uncommon for a civil service to have greater than 15 levels of hierarchy, an audit firm can have 10. Quite sustainable for millennia, the Catholic Church has five levels of hierarchy from the Pope to the village priest.
Today hierarchical organisational models aren’t just being turned upside down—they’re being deconstructed from the inside out. Many leading businesses are reinventing themselves to operate as ‘networks of teams’ to keep pace with the challenges of a fluid, constantly changing, unpredictable world.
Here the focus is on a high degree of empowerment, strong communication, and rapid information flow. Simply calling a group a ‘team’ does not make it one. A real team has members who are ‘collectively mutually accountable for results’.
Resist adding layers
To make it easy to communicate, for many, the ideal is that businesses become flatter and leaner, more agile. Yet in practice, as organisations age, they tend to get larger and more complex. They just keep adding layers. Managers often pride themselves on how many staff they have reporting to them.
“In his book Team of Teams, General Stanley McChrystal describes how the US military’s hierarchical command and control structure hindered operational success during the early stages of the Iraq war. After watching Al-Qaeda disrupt his army and win battles, McChrystal’s solution was dramatic: Decentralise authority to highly trained and empowered teams and develop a real-time information and operations group to centralise information and provide all teams with real-time, accurate data about activities everywhere,” notes Deloitte Insights.
Implementing a ‘network of teams’ approach involves moving staff people into customer, product-or market-focused teams, led by leaders who are experts in their area. These teams set their own goals and decisions within the context of an overarching strategy or business plan, reversing the traditional structure of goal and performance management.
Silos are replaced with an information and operations centre to share information and identify connections between team activities and the desired results.
Subtraction, not addition
The aim is to encourage people to work across teams, using techniques like “hackathons,” open office spaces that promote collaboration (Apple and Cleveland Clinic), and job rotation to give staff a common understanding of one another.
Allow people to move from team to team as needed—similar to the way experts come together on Hollywood movie sets or in global consulting firms —and then ensure that people have a home to return to once a team-based project is done. This changes the concept of a “job description” to that of a “mission specialist” or “technical specialist.”
Thanks to technology, teams can easily use web or mobile apps [like WhatsApp] to share goals, keep up to date on customer interactions, communicate product quality or brand issues, and build a common culture. Rather than having to send messages up and down the corporate pyramid, people can access information immediately, with someone playing the role of ‘facilitator glue’. Smaller organisational units tap into the human strengths of communication: People simply know each other better.
In design, businesses have shifted to today’s matrix and lattice structures, with platform business models dominating the world of commerce, turning notions of the importance of owning physical assets, and ‘bricks and mortar’ upside down. When we face business problems we tend to revert to the default solution of—What can we add to fix this? Often the solution lies in subtraction. How can one things simpler and remove the roadblocks?
